Despite the ailing nationwide outlook for the trillion-dollar logistics industry, Jeff Lynch, president of ITS Logistics in Sparks, says the warehousing and transportation industries in northern Nevada are expected to remain strong.

“Reno still has a very bright future,” Lynch says “We are strategically located for companies that need West Coast distribution. Reno is still an ideal location.”

While many major international companies struggle due to widescale declines in shipping volume — for example, DHL Worldwide this autumn announced it was suspending domestic shipping services in the United States — smaller companies still can thrive in 2009.

Lynch says ITS Logistics, which employs 160 and recently moved into a 125,000-squarefoot warehouse facility at Tahoe Reno Industrial Center,will add 40 to 65 positions in 2009. The nine-year-old company currently is hiring 15 additional workers, including four or five management positions, to meet the demands of a growing volume of business.

“A lot of people in the industry are struggling, but we are a small dynamic regional company experiencing great growth,” Lynch says.“We have such a massive pie to go after that it’s pretty easy to chew off some new business.” Lynch says the company’s growth — 35 percent in 2008 and a predicted 35 percent in 2009 — is being driven by strategic relationships with large clients.

“There are some challenges within the Reno market, but the industry as a whole is healthy,” Lynch says. “Companies need a regional distribution presence.” Another northern Nevada logistics provider expecting to grow this year is Leach Logistics in Sparks. President Greg Leach started his company in 1984 with little more than a phone and an office.

Today the company occupies 600,000 square feet on East Glendale Avenue and employs more than 50 full-time workers. By adding two new business units — dryheat and steam sterilization of imported foodgrade products — Leach Logistics predicts growth of 17 percent in 2009 and 24 percent for 2010. The company grew by 4 percent in 2008, Leach says.

“It is going to be a good year for us,” he says.“We do lot of food-grade items and have positioned ourselves with several Fortune 400 companies, so we are pretty fortunate.”

Leach Logistics has already added four employees for its new dry-heat sterilization business and expects to add six more in February once the steam sterilization equipment is up and running. Leach says his company is uniquely positioned to garner market share because it not only packages and ships bulk foods but also mills and processes them.

“When we bring products in it gives us opportunities to package, mill or process it,” Leach says.“Because of the cost of transportation, having it packaged and shipped direct opens up lot of opportunities for our packaging division.”

Leach notes that although business remains strong, average wait times for customers to pay their bills has increased threefold. “A year ago receivables averaged 11 days; today it is 41,” he says.“But we see it coming and plan for it.” Lynch of ITS Logistics say a big challenge facing the industry lies within the transportation segment. The economic downturn has adversely affected profit margins and sharply increased pricing pressure, Lynch says, and as a result there are now more trucks and drivers in the market than freight.

Additionally, he says, northern Nevada faces increasing competition from California for business with companies that import goods.

“Outside of the major metro areas, California is competing a lot harder with us — it is not letting go of those companies as easy,” he says.“But companies that distribute throughout the West Coast, and are diverse about how they bring products in, those companies still make sense to be here.We will always be attractive to a certain segment of the industry because of our location.” Mike McCabe, senior vice president of the industrial properties group for Colliers International, says northern Nevada might attract some new third-party logistics providers in 2009. “Third-party tends to be a bright, shiny star,”McCabe says.“Reno’s fundamentals from a logistics standpoint are still very positive. The downturn in fuel costs brought transportation rates to the forefront, and as companies look to move inventories closer to market Reno stands a good chance at attracting new warehousing and logistics companies.

“Logistics executives don’t want to rock the boat with major network changes, but when a third-party provider can bring a million-dollar savings to your operating budget within a region, it just makes sense,”McCabe adds.